Professional Webmaster Business Issues Forum

Hello, I'm in my late 20s and started building websites as an investment vehicle in 2005. Since then, I have sold around 100K worth and I just sold another today. While it was not much, it still beat any interest I've gained in my Roth IRA and money market accounts. Plus, it's FUN..and the hunt to develop the next great idea is what keeps me motivated!

Also, what I like to do is think of something I want to buy in the next 2-5 years...say...a new car...or a new house. I then build a website and plan to sell it within that time frame. So far this year I've purchased an airplane (20k) and acreage out in the country.

Disclaimer: I'm single...so that REALLY helps, too. But I figured I'd do what I can until I get to my mid 30s..then I'll settle down. OH yea, and I get to be self-employed. The best of both worlds.

I have been fascinated with this idea for a few years and researched it many times. However it appears you are having much better luck with the process than a lot of people I have talked with. I have talked with people that have successfully sold a web site, but none that build them for that explicit purpose.

I think this is a great discussion topic if you would care to share more details, i.e. what type of sites are you building, who normally buys them, how do you advertise them for sale once built, what are you selling content? etc. Please do share some details and I think we can have a great discussion on this.

This is something I have thought about as well. I like it much more than domain name flipping because you are actually adding value to the domain name instead of degrading it's value with adverts.

I would also like some more info if skunker is willing to provide it.

What types of sites? Who is buying? How do you advertise the sites? What is the price range you sell for?

I would love to get into this and have done it in my head a few times, but never more than that.

My idea for this type of thing was more along the lines of building a site with a few companies in mind to purchase it.

Example: A book review site, some content on the best seller lists, a couple site level reviews, a forum. Once the forum gets a decent amount of users I was thinking I could start courting local book stores and ask them if they want to brand the site as their own and either pay for the branding or buy it outright and take over everything.

Is this along the lines that you go? Do you ever offer just branding and keep ownership of the site and continue on developing it? Or do you just sell them and hand over everything?

I'd be happy to talk about it in detail. I'd have to do it later as I'm busy selling a site right now:)

I suppose, like anything else, you got to have passion in the subjects you build sites around. For example, I like military vehicles...so I just find a photo gallery script and stock it with military vehicle photos taken from government sources. Then, I add some social features like user photo submissions, etc. Also add a forum.

Selling sites is not the only thing I do. I actually am a freelancer web designer so that takes up time, too. Webdesign doesnt' pay much so I just focus most of my time building sites like this.

it appears you are having much better luck with the process than a lot of people

ditto. Perhaps you're lucky, perhaps you're talented, perhaps you're just savvy and figured out what to create and how to sell it. Regardless of your methods I congratulate you because it's a business model that many others have been unable to achieve success with. Cheers!

The real question, I believe, is: Since no one will purchase a non successful site how do you make them successful? adWords, marketing (if so type of?) etc.... And how do you measure site success? Ranking, R O I, others...

Good question. I think you have to factor in a combination of all of these. I have some small sites that don't particularly rank well but their ROI is incredible. Highly targeted keywords, visitors who are intent on buying... If I went by ROI alone these small sites would essentially be worth more than the larger sites, sites that rank better, get more traffic, yet don't get the same return per visitor.

I agree that with more detail, this thread could get really interesting. My biggest question would be, "Why flip?" If the site is built out, ready to make money - I'd have to get a lot to cover my investment (especially time), plus a nice premium based on projected upside potential.

How do you build fora quickly and effectively enough to be worthwhile? Sites that have fora that get minimal action start looking bad in a hurry. Embarrassing. I'm a fan of fora and blogs, but they require a lot of work to get going and also to sustain. Not kind to me in return for the most part; but not my specialty.

I agree with wyweb. My smallest sites are the most highly targeted and do the best overall. They may not 'rake it in', but return consistent revenues with minimal attention and are foundation for everything.

If I've built a site that is ready to make money, I can't justify selling it. I'd be happy to build and flip, but have rarely come across opportunities to sell that come even close to being as good a deal as keeping.

I do go the other way. I like to buy 'junk' sites. Crummy hobby sites that look awful, need complete rebuilds.....situations where the owner isn't really into it anymore. These sites just need some TLC and have great potential. I make fair offers, but it is amazing how many sites that haven't been touched in aeons are suddenly given Google valuations. I'm usually willing to counter-offer, but only because I've built in that this is what people do. My price is fixed before the initial offer. If they jerk me around, I walk. If they come back later, I have to really want that site as entry into the niche; having more projects than time. Surprising how many people look at their old, abandoned sites as though they are retirement funds, not to be touched. Some are - most just rot.

My smallest sites are the most highly targeted and do the best overall. They may not 'rake it in', but return consistent revenues with minimal attention and are foundation for everything.

This sounds interesting. What do you mean by small? Also what constitutes minimal attention? i.e. 2 hours a month, more, less? I would love to do this, but in my head I must keep thinking up big sites, do you have any examples you would be willing to share?

Micro-small. Gross sales starting at $2k month with reasonable potential to pretty quickly 'grow' to $6k - $10k. No one site throws off a lot of profit, but a bunch of them add up nicely. My 'primary merchant account' is set up through my bank to handle each website as a distinct merchant account with it's own discount rate based on ticket average. Everything winds up under the umbrella of my company. Each website is essentially a 'brand' of that company. So, no merchant account hassles, no unneeded bank accounts, just set up separate 'companies' in QB Pro so that I can manage each 'brand' separately. My accountant dumps all of the numbers in the hopper and handles that end.

Because the niches are so small, I can get sales moving on Day 1 with AdWords for cheap. Small nicne = highly targeted keywords + minimal CPC. Small niches also mean competitors that don't have much skill or money or time to put into their own websites, so we quickly have, IMO, the best site on the subject and can usually move it to Page 1 or #1 pretty well. Then it's a matter of 'poaching' customers.

Once it's up and ranking, time is not much more than shipping orders. Additional time is optional. We can add content on a 'whenever' basis to help firm up its position in the SERPs.

I can't share a specific example here - just think small and targeted. Not getting rich, but it's a decent enough living, and there is some comfort to being spread out among a nice group of unrelated products and sites. Even product lines that can be tied together I prefer to separate and run two sites instead of one larger one, because I can target keywords for cheap. So long as the niche is big enough to get enough searches and clicks to give me good QS with Google it is probably big enough to interest me. If I can't get a 10/10 pretty much 'at will' for most keywords, something is wrong.

One of these days I will be ahead of the curve with the right product or niche and maybe be able to take it big; ride the wave.

Small, steady, and boring is not a bad place to be. It's the steady profit that counts. More is better of course, nice little sites are gifts that keep on giving. That isn't to say that I have not found myself to be top dog in an unprofitable niche. Gotta know when to bail on those. Google Analytics will tell me a lot in hurry if I've misjudged the potential and search interest. We'll pull the plug if there isn't enough profit.

Because of the type of niches that we look at, repeat business is high and steady. I'll look at taking on any product of quality.

Actual products almost exclusively. No 'information products' (ebooks and such), and no AdSense on any product site. We've got some MFA sites, but they make nothing. Garbage. I've concluded that, for us, when putting up a quality content site, we might as well be selling the products rather than panhandling change sending referrals. Getting fired by my biggest client has 'made' my future. I do almost no webwork for anyone but myself anymore. I am doing the work. I should get the chance to cash in.

We're a family business. I ship very little merchandise myself. I don't even see most of it, living about 4 hours from our shipping location. We stock everything in-house for every website. My brother fills the order and ships. That's all he has to do when an order comes in. Then he's done. Most everything is automatic or close enough that the manual work is machine-like. Five minutes on his end per order? $25 or $250 - it doesn't really affect the time to ship. He's been doing it long enough that just looking at an order will tell him which box to grab, and we've got a monitor right over the shipping table so orders are double and triple checked with no effort. (The faster path to losing real money is to ship an order incorrectly!) A custom alarm (the Star Trek red alert on a loop) sounds when an order comes in, so he can kick back if things are slow, but bang out an order at any time. He's got a temp guy so that he's not locked into seven days a week and burnout. Putting in video and audio cost nothing. Though we trust the guy and he's a good guy, I'm not stupid enough to trust the guy. It's business (and very 'unobtrusive'); though no secret.

I manage the books, marketing, website, from here. The arrangement allows us to email a Receipt, complete with Delivery Confirmation number within 15 minutes of submission pretty darn close to 24/7. On my end, I probably put another five minutes into each order; or have my perma-temp 'Girl Friday' handle the final details. She can work here, but mostly works remotely and sends me completed files. I stole her from a deli shop here in town.

Although I am not in a 'hiring position' anymore, in a previous life (restaurant management before the knees blew up), I hired, as much as possible, people that gave me service that was 'above their pay grade'. Took them from wherever I met them. The girl in the deli was way too smart for her job, and treated well below what she gave to it - easy hire. More money, better work, more potential, absolute respect..... Over a period of weeks I already knew that she was the kind of person that would be good at anything she wanted to try. When the time was right and I couldn't afford not to have somebody local backing me up, I gave her my card. People that are good, pleasant, professional - are likely to be good at anything in which the take an interest.

I work pretty diligently, but am organized to the extreme, so the time I spend varies widely according to priority. One site may see almost no effort put into it for several months at time; just coasting along. I may spend all day and night adding to another site for a week. I may do nothing at all beyond monitoring AdWords campaigns for several weeks at a time and spend the rest of my time on personal projects that I have hopes for. I do monitor the AdWords campaigns pretty closely. It's a lot of money going out every day and though 'even keel' is my goal, things can change in hurry and that can get expensive. I do not delegate or get lax on how each and every campaign and keyword is doing. In the blink of an eye a keyword that I don't even really care that much about can get a lot of clicks, at much higher than expected CPC. I will pause that keyword quick it isn't converting.

Right now, I am maybe 75% through the process of self publishing a book (to be printed in Italy). I have very high hopes for the run, and see a 'series' potential. That is getting a lot of time right now. Self publishing doesn't have the best reputation in some circles, but I feel well positioned to make the project(s) do well. We shall see. It looks like pre-sell will be very high, so that does a lot to mitigate the cash commitment.

So - answering your question about time is difficult, because the money making sites sometimes take 100% of my day; every day for days at a time. Other times, brother, mother, and Girl Friday (who is getting more and more authority) run everything, and it's just not the big a deal. Order fulfillment is the least of my interests. Pack it, ship it. Mostly time is a factor of how much content I want to build into the site, deciding on the rate and ultimate reasonable limit of expansion. Launching is where the big-time time is at. Starting with nothing and forcing my way into a niche. Nobody is getting rich. No one site is would impress anyone here. The collection is a nice grouping though. Everybody is making a decent living. Mother was a Senior Financial Analyst and sees that standards and practices (along with checks and balances) are in place and enforced in every area. She doesn't actually 'do' that much, but her wealth of high level experience makes these important controls a minor undertaking for her.

I, or Girl Friday, or both of us, go down once a quarter and take an inventory for every product of every website and spend a couple of days looking for any organizational improvement opportunities. The inventories are done before we arrive, so just a matter of double-checking accuracy, looking for discrepancies - standard stuff. Trust, but verify - even family. Business comes first when it comes to business. Family comes first when it comes to family. They can be blended, but, IMO, they are never the same.

Always on the lookout for products or niches. Always willing to add something completely new. Always willing to walk away. We've room to grow all around, are willing to do so, but don't have to.

building websites as an investment vehicle in 2005. Since then, I have sold around 100K worth and I just sold another today.

That's one road to go but you could've built a massive business with recurring income in the same time frame.

For example, you sold 100K worth of sites in 4 years and I have multiple sites making more money every year than you made in 4 years.

So had you held them and grown them into full fledged monetized properties, not only could you have potentially have made 4x during the same time frame you could sell them for much more in the current market.

However, I find it hard to sell sites that are making a nice recurring income because then you have to start building a new site from scratch and ramp it up while living off the income of the previous sale.

Why keep starting over from scratch repeatedly when you can build a small cash generating empire instead?

Bill, it was my decision from the get-go that I was going to enjoy my 20s and cash out. I took the risk and decided that I would also build new sites later...which I am doing now. So far so good, and while I haven't had the success I did earlier, I'm still making decent money. I'm not too concerned about making lots of money as that was never my goal. I would rather enjoy life when I can.

I suppose, like anything else, you got to have passion in the subjects you build sites around.

I hear this a lot and I disagree.

I buy sites, I'm a recognised expert in the field. I live the Internet lifestyle working minimal hours a week because I earn more than a fair return from the many "web property investments" I have. I won't tell you what I've spent my money on but I will say I'm very happy with my financial situation.

I look for a good business model, I analyse the earnings, the site's strengths and the risks relative to the asking price (I've written on the valuation of websites elsewhere and can find it if you dig around a bit [webmasterworld.com]). And then I buy it. I find someone who has an interest in the subject and assign them to do specific tasks on the site. And I move on to the next acquisition.

If you treat it as a business, then passion for the subject shouldn't come into it. If you're doing it as a hobby/to make a bit of pocket money/learn the ropes ... then passion is great. Otherwise the business merits need to overweigh your interest in the niche.

Passion for business, however, is a definite plus. The numerous business models - how people make money online - facinate me. I've written on it, I've spoken on it, I've dabbled with everything from proxies to product sales to communities to the passive Adsense model on evergreen content sites. And it's great fun.

I've now been able to focus on those businesses which make the least demands on me. No more product shipping, customer services, taking phone calls, sending regular newsletters or writing a blog post everyday.

So had you held them and grown them into full fledged monetized properties, not only could you have potentially have made 4x during the same time frame you could sell them for much more in the current market.

There's a flaw in that argument. I know that IncrediBILL has often suggested that selling a profitable site is not a good idea. I disagree. You need to see if there's a business case for selling; if sellling fits your strategic plans. For every single revenue generating site I own I'm happy to sell if an offer comes in at even 20-30% over normal market rates (rates at which similar sites are selling for in the various forums I monitor). The business case is simple: If I own a site that's would attract max bids of $100,000 in the market and someone offers me $120,000 then it makes sense to sell that site, pocket $20K and buy another site to replace the first one using the remaining $100K. I'm $20K better off than if I did nothing. Of course, this relies on a mature market, lots of sites coming up for sale, a free flow of sites etc. In certain price ranges that's very much the case. A good understanding of the mechanics - from valuation to due diligence to risk assessment - doesn't hurt either.

skunker, how to you estimate a price for your websites? I mean, based on the revenue they make at the time of selling, based on traffic, on growth rates, etc.? And how do you find people who buy your websites?

I have been successfully selling sites since for several years. Almost all the sites I sell go between $500 and $3500 with a half dozen or so selling for mid five figures. I sell 1 or 2 sites per month.

The more expensive sites were ecommerce sites, but I don't build many of them.

@Bill - I didn't keep these sites because I don't want to manage the merchant accounts, inventory, shipping, back orders and all the small issues that come with running ecommerce sites. I much preferred building the sites, promoting them and then cashing out.

I make the majority of my income through SEM consulting so promoting my own sites was easy enough. Especially when I found the kinds of sites that sell well - service industry Web sites. Specifically, local service companies.

The first thing I start with is a good domain name. Always dot com, never any numbers in it and rarely do I buy domains with hyphens. This is where you need to be careful because if you spend too much on a domain name and you can't sell the Web site at a large enough profit you could end up making $30 per hour - or worse. I start each Web site with the goal of making $100 per hour - at a minimum.

I then quickly add 5 to 12 pages of optimized content that speaks to the subject at hand. I usually write the content myself and can crank out three, 400 to 500 word articles in 1 hour. I sometimes outsource to a couple of ladies I work with located in the Philippines.

Next, I add some images to the site, give it a few back links and since the competition level is generally low in these areas - it is positioned well on Google rather quickly.

I almost never put Adsense on any of these Web sites. I don't want to trip any MFA filters (if they exist) and I don't want the sale of the site to have anything to do with current income.

Here are some of the businesses that I sell to: • Home Improvement • Law • Dentistry • Chiropractors • Accountants • Anything cosmetic

The big secret is providing something of value to someone who needs it. I don't waste too much time in hard sales... if someone does not want a site I quickly move on.

If you treat it as a business, then passion for the subject shouldn't come into it. If you're doing it as a hobby/to make a bit of pocket money/learn the ropes ... then passion is great. Otherwise the business merits need to overweigh your interest in the niche.

Yes and no. If you want to have a "best of breed" golf or skiing site, it's useful to be interested in (and to be knowldgeable about) golf or skiing.

That doesn't mean a passionate golfer or skier doesn't need to think carefully about a business model (and to understand how publishing works) when deciding to publish a golf or skiing site that's intended to generate serious revenue.

chicagohh, I see the kind of customer you are selling the website to. My question is then: How do you sell them? All these people (lawyers, beauticians, dentists, etc.) will probably get tons of e-mails with all sorts of spammy offers - how do you stand out so that they recognise the actual value of your proposal?

I am asking this because I had a similar strategy once: Writing articles for my website that would rank well for "widget company - widget ville", then offering to pay a reasonalbe fee for adding information on widget company x on this very page. Didn't work.

Plus, it's FUN..and the hunt to develop the next great idea is what keeps me motivated!

You are probably doing great compared to most people your age, especially in this economy. And it is cool having a job that keeps you interested and motivated.

But for me personally, I am with Incredibill and look for the recurring income each year. I buy sites but have never sold a one. I keep a bunch of no to low earning sites around as my backup sites that I would work on more if my main sites ever got nuked for some reason.